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EDI Transmission – VAN or SFTP?

Today we will be talking about Electronic data interchange or EDI for short.

Wikipedia defines EDI as: An electronic communication method that provides standards for exchanging data via any electronic means. By adhering to the same standard, two different companies or organizations, even in two different countries, can electronically exchange documents (such as purchase orders, invoices, shipping notices, and many others).

A Value-added Network (VAN) is a hosted service offering, that acts as an intermediary between business partners that share “standards based” or “proprietary” data, via shared Business.

During the early stages of EDI, a VAN was used to pull and push data between business partners. However, today I am unable to understand why anyone will elect to pay a VAN for such services when SFTP is so readily available and free. A VAN can easily cost you up to $1,000 a month for EDI updates to just one customer. Before you elect to use a VAN please take a look at just how simple EDI actually is.

EDI is simply a text file that is transmitted to another business partner to read and import data into their system. Collecting information from data sources and storing into a fixed file layout is not difficult. There are many options available to transmit files via ftp, uploading and downloading. This is usually done with a simple folder structure for incoming and outgoing files. When the party picks up or transmits a file, it is moved to an archive folder and stored until it is time to permanently delete it.

EDI can easily reduce time for entering data and sending information to customers. It improves accuracy and customer service. But like all automated services, it must be monitored and include built in notification of failures.

Within the transportation industry, here are the most common EDI transmissions types:

204 – Load tender The customer will send a load offering with their control number to the trucking company. This file will contain, pick and drop points along with products and requested dates.

990 – Load tender accept or reject. If the 204 load tender is accepted it is pushed into the trucking companies dispatch program and a message of “accept” is sent back to the company that tendered the load. The accept 990 will include the trucking companies controlling load number combined with the customer’s controlling load number. Or a ‘reject’ notice will be sent.

214 – Load status message. At the minimum, a 214 status message will be sent with each completed pick and drop and a code for the completed unload at the final destination. 214 Status messages may also notify customers of scheduled appointment changes, current in transit locations, delays and many other exceptions.

210 – Freight Invoice. This is the freight invoice that may be as simple as the total due based on your number and their controlling number, or detailed line items may be required.

997 – Functional acknowledgment. A simple file ‘acknowledging’ the receipt of prior transmissions. For example, a 997 is frequently transmitted to confirm receipt of an accept or reject for a load tender or a 210 freight invoice. By receiving an acknowledgment, each party is assured their information was received, read, and accepted by the other business party. Failure to receive the 997 will trigger your IT staff to find and fix the issue that has arisen.

Take a little time to review the specifications and understand the process. I promise you it is not difficult or complex. You will be able to complete the process more quickly and assist your IT staff by coordinating the efforts between operations, administration and IT. Look for a in-house solution your staff can handle and avoid the recurring fees from middle men that ‘translate’ the data between you and your customer.